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CHICAGO — Missouri-based Mercy Health saw such strong retail and institutional interest on its $250 million new-money issue for capital projects — including the replacement of its Joplin hospital destroyed by a May 2011 tornado — it decided to complete the pricing a day early Tuesday.

The finance team expected to open up the sale to institutional buyers on Wednesday after Tuesday’s retail order period, but strong demand on both sides prompted officials to complete the pricing Tuesday, a member of the team said.

“There was very strong retail interest especially in the Joplin area,” said a member of the finance team who attributed the appeal to a strong marketing effort and local interest in the system’s rebuilding efforts.

The system priced the debt through the Missouri Health and Educational Facilities Authority. Bank of America Merrill Lynch is the senior manager and Barclays Capital is co-senior.

Ponder & Co. is financial adviser. Gilmore & Bell PC is bond counsel and Thompson Coburn LLP is counsel to the authority. Edward Jones, JPMorgan and Wells Fargo Securities were in a selling group for the retail order period.

The combination of the health system’s solid credit, its rare offering of fixed-rate paper, and the strong retail interest helped pique institutional interest. “With institutional demand so strong, they decided to go ahead Tuesday,” said the finance team member.

Ahead of the sale, Moody’s Investors Service affirmed Mercy’s Aa3 rating and Standard & Poor’s affirmed Mercy’s AA-minus. Both assign a stable outlook to $635 million of debt, including the new issue.

An unrestricted gross revenue pledge of the Mercy Health parent and its restricted affiliates secures its debt. The system also has another $364 million of unrated debt directly purchased by banks.

Proceeds of the sale will finance a variety of capital projects slated for some of the system’s 31 hospitals and more than 300 outpatient facilities in Arkansas, Kansas, Missouri and Oklahoma that generate more than $4 billion annually.

The most prominent is the new St. John’s Mercy Hospital in Joplin. The more than 40-year-old hospital was wrecked by the May 22, 2011, EF5 tornado that ripped through the city. It claimed more than 161 lives, injured more than 1,000, and destroyed more than 8,000 homes and businesses in the city, which is located about 150 miles south of Kansas City. It was one of the deadliest tornados on record.

Mercy expects much of the cost to eventually be covered by insurance. The system has demolished the old facility and the early stages of construction are underway on the new facility at a site a few miles away. The new facility is expected to open in 2015, while the old site will house an elementary school and park.

The system has estimated that the new hospital, temporary facilities and lost revenue will total between $900 million and $1 billion. Insurance coverage of $750 million will help cover costs, including $478 million already received.

Mercy has also launched a philanthropic campaign expected to cover some expenses and may receive some Federal Emergency Management Agency funds. An equity contribution from the health system of around $200 million would be manageable, analysts said.

“We believe that Mercy’s residual equity contribution toward the rebuilding effort is manageable, especially given that the group will ultimately emerge from the situation with a new facility at a new site potentially better-positioned to capture the growth in Joplin,” Standard & Poor’s wrote.

The loss of the Joplin facility poses some unknowns and future risks. “Mercy has excellent recovery prospects from insurance and federal disaster funding, but the long-term financial implications are not yet clear,” according to S&P.

Analysts added that the loss of the facility makes it more difficult to assess the overall system’s financial results “due to the treatment of Joplin hospital operations under generally accepted accounting principles as separate from other operations, and the inclusion of all insurance proceeds as operating revenue.”

The system’s strengths stem from its large size, geographic diversity, low debt, and strong operating results, especially in Mercy’s top three regions. The system has a low debt burden of 1.5% of revenue and strong debt-service coverage in the five- to seven-times range. That coverage is reduced to four times when operating leases are included.

Mercy Health has completed an electronic medical-record system and benefits from a continued integration of physicians in all of its regional markets — both strategies for coping with federal health care reforms. It’s also expanded its footprint in existing markets, and intends to sell its facility in Hot Springs, Ark., that consistently generates operating losses, dragging down results.

The system’s strengths are offset by challenges posed by weak unrestricted reserve levels for the rating level and operating profitability that remains challenged by modest levels and plans for ongoing capital spending.

Facilities in four of the system’s six regions saw improved but modest profits in fiscal 2012, with Joplin excluded. Standard & Poor’s noted that Mercy is highly reliant on the strong results of its St. Louis and Springfield, Mo., facilities and could face rating pressure if either were to deteriorate.

The Springfield market is its largest and generates $1.6 billion in operating revenue; the St. Louis market generates $1.1 billion.

Mercy has signed a letter of intent to acquire the 251-bed Jefferson Regional Medical Center in Crystal City, south of St. Louis. Mercy is awaiting regulatory approval for both the acquisition and the sale of its Hot Springs hospital. Both are expected to close in 2013.

Other projects being funded by bond proceeds include a major renovation and infrastructure upgrades to its children’s hospital in Springfield, Missouri, construction of medical clinic in St. Charles, Missouri, and renovations at its St. Louis hospital.